Rise in HUL profit beats expectations

Mumbai, July 28: Hindustan Unilever Ltd (HUL) today beat Street estimates by posting an around 4 per cent growth in net profit at Rs 1,056.85 crore for the first quarter ended June.

The FMCG giant had registered a profit of Rs 1,019.25 crore in the same period a year ago.

Analysts had expected a net profit of over Rs 900 crore.

The strong performance came in spite of a rise in input costs. The company’s advertising and promotion expenses rose to nearly Rs 945 crore from Rs 890 crore in the same period of last year.

This better-than-expected growth in the bottomline has instilled some hope into the stock markets that the company and the sector may be coming back to the growth path. HUL has reported a higher volume growth of 6 per cent compared with 4 per cent in the previous year.

Shares of the company ended the day with a gain of 3.69 per cent at Rs 686.45 on the Bombay Stock Exchange. During the day, it surged 4.38 per cent to Rs 691.05.

On the National Stock Exchange, the stock settled at Rs 686, up 3.35 per cent.

The stock was the best performer among the blue-chips on both the Sensex and Nifty.

“While we are seeing headwinds on market growth, consumer spending and inflation, we remain focused on managing the business for long-term competitive and profitable growth and implementing our strategy with even greater rigour,” chairman Harish Manwani said.

The company’s chief financial officer P.B. Balaji said the market was slowing down further and the premium and discretionary categories remained under pressure.

“Market continues to slow down further. There is not much respite from high inflation and negative consumer sentiments. In case of premium category products, we are seeing customers buying smaller packets/sachets of premium categories as against bigger packets,” he said.

Revenues from soaps and detergents during the first quarter increased 12.90 per cent to Rs 3,847.58 crore and from personal products by 14.66 per cent to Rs 2,159.56 crore.

Earnings from beverages grew 10.45 per cent to Rs 836.56 crore and packaged foods by 18.76 per cent to Rs 543.78 crore.